Tiscali 2014 Annual Report Download - page 138

Annual financial report as at 31 December 2014
Date
File Name
Status
Page
-
Annual Report as at 31
December 2014
138
division of “current/non-current” assets and liabilities; the Cash Flow Statement was drawn up by
following the indirect method.
Accounting standards
General principles
The financial statements were prepared in compliance with the IAS/IFRS International Financial
Reporting Standards (IFRS). The main accounting standards are detailed below. These standards
were applied consistently to all periods presented.
Preparation of the financial statements requires management to make accounting estimates and in
certain cases assumptions in the application of accounting standards. The areas of the financial
statements which, under the circumstances, presuppose the adoption of applicative assumptions and
those more fully characterized by estimates made, are described in the subsequent note of this
section.
Equity investments in subsidiaries
Equity investments in subsidiaries and affiliated companies are recognised at cost, adjusted for any
permanent impairment.
In application of IAS 36, the value of equity investments recognised at cost is reduced if there is
impairment or if circumstances emerge that indicate that said cost is not recoverable. If the impairment
is discovered to no longer apply or is reduced, the book value is increased to the new estimated
recoverable value, within the limits of the value recognised initially.
Losses in value on assets (Impairment)
The book value of equity investments, other intangible assets and properties, plant and machinery is
tested for impairment whenever there is an indication that the asset may have suffered impairment.
The assets in question are tested annually or more frequently if there is any indication that those
assets have suffered impairment. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment. Where it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the
Cash Generating Unit (CGU) to which the asset belongs. The recoverable amount is the higher
between the ‘fair value’ less sales costs and its utilisation value. When assessing the utilisation value,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments on the value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its book
value, the latter is written down to its recoverable amount. The relevant impairment is booked to the
income statement under write-downs. If the reasons for impairment are considered to no longer apply
in the current year, the book value of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but not beyond the net book value that would have been
determined had no impairment been recognised for the asset in previous years. An impairment
reversal is booked to the income statement.
Other financial assets
Other financial assets are valued, consistently with IAS 39 provisions for financial assets ‘available for
sale’, at fair value or alternatively at cost whenever fair value cannot be reliably calculated. Gains and
losses from changes in fair value are directly booked to equity until the security is disposed of or is